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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 75.00 | ACUITE BB+ | Downgraded | Issuer not co-operating* | - |
| Bank Loan Ratings | 20.00 | - | ACUITE A4+ | Downgraded | Issuer not co-operating* |
| Total Outstanding Quantum (Rs. Cr) | 95.00 | - | - |
| Rating Rationale |
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Acuite has downgraded its long term rating to Acuite BB+( read as Acuite double B plus) from Acuite BBB (read as Acuite triple B) and short-term rating to Acuite A4+(read as Acuite A four plus) from Acuite A2 (read as Acuite A two) on the Rs.95.00 crore bank facilities of Riddhi Siddhi Cotex Private Limited. The rating is now an indicative rating and is based on the best available information. The rating is downgraded because of information risk.
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| About the Company |
| Riddhi Siddhi Cotex Pvt. Ltd. (RSCL) based of Aurangabad was incorporated in 2008. The company is part of ‘Riddhi Siddhi Group’ having long standing established track record of over three decades in the Cotton Industry. The company is engaged in processes raw cotton and trades in ginned cotton and cotton seeds. The company is also into spinning of cotton bales. The manufacturing unit is located at Ahmednagar, Tamil Nadu and Kerala. The unit has capacity of 6.87 lakhs quintal for ginning and spinning unit. The company is managed by Agarwal family; Mr. Gopal Agrawal, Mr. Shyam Agrawal and Mr. Sanjay Agrawal being the keypromoters. |
| About the Group |
| Riddhi siddhi group has an established presence in textile industry and is known for cotton trade in Madhya Pradesh and Maharashtra. The Group is managed by Agarwal family; Mr. Gopal Agrawal, Mr. Shyam Agrawal and Mr. Sanjay Agrawal being the key promoters. The group is engaged in Cotton Ginning, Pressing, Trading, Processing of Raw Cotton & Yarn Carded & allied activities. The group is having presence in Group owns 4 Ginning and pressing units and 7 Spinning Units (Leased basis) at different states in Maharashtra, Telangana, Andhra Pradesh, Tamil Nadu, Kerala and Karnataka. It is expanding to other cotton growing areas. |
| Non-cooperation by the issuer/borrower |
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Acuité has been requesting for data, information and undertakings from the rated entity for conducting surveillance & review of the rating. However, the issuer/borrower failed to submit the complete information before the due date. Acuité believes that information risk is a critical component in such ratings, and noncooperation by the issuer along with unwillingness to provide information could be a sign of potential deterioration in its overall credit quality. This rating is, therefore, being flagged as “Issuer not-cooperating”, in line with prevailing SEBI regulations and Acuité’s policies.
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| Limitation regarding information availability |
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The rating is based on information available from sources other than the issuer/borrower (in the absence of information provided by the issuer/borrower). Acuité endeavoured to gather information about the entity / industry from the public domain. Therefore, Acuité cautions lenders and investors regarding the use of such information, on which the indicative credit rating is based.
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| Rating Sensitivities |
| Sufficient information not provided by the issuer / available for Acuité to comment upon. |
| Material Covenants |
| None |
| Liquidity Position |
| Sufficient information not provided by the issuer / available for Acuité to comment upon. |
| Outlook |
| Not Applicable |
| Particulars | Unit | FY 21 (Actual) | FY 20 (Actual) |
| Operating Income | Rs. Cr. | 3820.29 | 688.12 |
| PAT | Rs. Cr. | 35.50 | 7.61 |
| PAT Margin | (%) | 0.93 | 1.11 |
| Total Debt/Tangible Net Worth | Times | 0.95 | 1.57 |
| PBDIT/Interest | Times | 4.11 | 1.77 |
| Status of non-cooperation with previous CRA |
| Not Applicable |
| Any other information |
| Acuité is yet to receive the latest No Default Statement (NDS) from the rated entity, despite repeated requests and follow-ups. |
| Applicable Criteria |
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• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm |
| Note on Complexity Levels of the Rated Instrument |
| In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’ s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in. |
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